Akaralph's  Instablog

Send Message
Semi-retired consultant residing in beautiful northeast Georgia. Over 40 years of responsible experience in planning, finances and investment management. Primary focus is on portfolio development for retired (or nearly retired) individuals who do not possess great wealth. The Protected Principal... More
  • OK, Where Do We Go From Here 0 comments
    Jan 29, 2010 12:49 PM

    Well, it doesn't look as if the market rally of this morning is going to hold. Guessing that most folks can see through the GDP "increase" and can now look forward to the coming downward revision that almost always is a surety.

    I think we now need to take a step back and determine how we can protect our capital while continuing to generate an acceptable income stream. My favorite sector, the energy MLP's have once again come through on the distribution front. Of the 20 that I track, seven have increased the distribution, while the other 13 retained distributions at prior levels. EPD and NRGY seem to be the strongest of the group, and I have added to positions in ENP and CQP recently. FRHLF looks particularly good from the standpoint of a Canadian energy trust.

    Aside from the MLP's, I was also impressed that closed-end funds did not have the large year-end dividends that typically tank them in January. I continue to carefully reasearch the CEF's, and have done a little buying of late. Am trying to be defensive and am concentrating of those funds holding senior debt, floating rate instruments, multi-sector bonds and currencies. I believe that in today's market a defensive posture is warranted, and many of these type funds still trade at significant discounts to NAV. Also, if one can stay away from those that are highly leveraged and those still having managed distributions, there are yields in the range of seven to nine percent still out there.

    In the commodities area I continue to follow hard currency funds such as those offered by Merk Funds, agricultural ETF's (Jim Roger's favorites), and look to add to gold at the $1000 level. I refrain from bullion, just because everywhere you look on the TV, folks are advertising how important it is to hold it. I prefer the miners, whom I think will benefit most from increased bullion pricing as the spread between the cost of production and the cost per ounce widens.

    I have recently begun to take a few equity and income positions in global and international CEF's, so as to disperse the risk. I believe that Australia is on the road to recovery, and like IAF at these levels, both for appreciation and possible dividend increases. Rounding out the defensive portfolio, I beleive that positions in global income funds and emerging market debt funds are, or will become appropriate.

    To sum things up, I heard nothing particularly encouraging in the State of the Union address and continue to believe our economy is living on borrowed time. Printing money 24/7 will only lead to higher inflation - the question is when will it kick in?

    Disclosure: Am long EPD, NRGY, ENP, CQP, FRHLF and IAF

Back To Akaralph's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • STON to re-state earnings. This can't be good for next week.
    Sep 3, 2016
  • Markets came back a bit - energy fell further at the close. Not optimistic here.
    Jun 14, 2016
  • DLNG making me look good.
    Dec 23, 2013
More »

Latest Comments

Most Commented
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.